Why GREET?

The incentives in the Inflation Reduction Act (IRA) present a huge opportunity to accelerate clean fuel production, but we need to make sure the incentives are implemented in a way that reflects the most accurate lifecycle analysis. Specifically, we need Treasury and the Department of Energy (DOE) to ensure that any changes to GREET reflect the most up-to-date science and environmental benefits of bioethanol, which delivers a nearly 50 percent reduction in carbon emissions compared to gasoline on a lifecycle basis.

Sound modeling will allow Treasury to accurately reward investments in solutions that deliver superior carbon savings. But the pathway for alcohol-to-jet fuels depends on regulators making the right decisions about the modeling of farm-based feedstocks. 

In addition to the 40B credit for sustainable aviation fuel (SAF), GREET is vital to assessing the eligibility for IRA biofuel incentives, including those governing hydrogen in Section 45V and biofuels generally in Section 45Z, the Clean Fuel Production Tax Credit. That’s why we need to make sure that Treasury accounts for all of ethanol’s carbon-reducing practices that are contained within the GREET model in any IRA guidance. Just as it would be ludicrous to put green, blue, grey, brown, and black hydrogen in the same bucket in terms of carbon intensity scoring, we’re asking that Treasury doesn’t put ethanol in the same bucket by locking out specific technologies.

However we use land in this country, the fact is that we’ve used the same amount of acreage for corn planting for nearly a century—acreage has hovered around the same level since 1926 or even dipped beneath that figure for a few years. Yet we’re able to produce seven times the amount of yield today as we were nearly one hundred years ago. These trends are reflected in hard data from the U.S. Department of Agriculture – data that helps to inform the GREET model. This innovative and efficient use of land hasn’t taken up any more space than it has for decades, and the results are more fuel options at the pump, greater access to lower-carbon fuels, and lower fuel prices for consumers. Those are three real, measurable benefits corn-based ethanol production delivers to the U.S. every day.

In April 2024, Treasury issued guidance that included an updated version of the GREET model that will be used in the administration of the 40B SAF tax credit. Thankfully, the new 40B GREET model trends with scientific consensus when it comes to measuring indirect land use change (iLUC)—assigning a more accurate value for iLUC in alcohol-to-jet SAF production than other models. However, the guidance included a more restrictive approach to recognizing the value of climate smart agriculture practices, ultimately requiring corn used in the production of SAF to be farmed on land using no-till farming, cover crops, and enhanced fertilizer—if the corn is farmed on land that doesn’t employ all three of these practices, than the SAF produced from it may not qualify for the 40B tax credit. This accounting tic may limit innovation and make farmers, blenders, and producers less—not more—likely to invest in emissions-reducing technologies. 

The 40B guidelines are only the beginning of an important journey for the bioeconomy. As the administration builds on the 40B GREET model, its guidance for the 45Z tax credit must be less prescriptive and more expansive—fully embracing the totality of innovations that, by its own admission, can demonstrably reduce carbon intensity. 

Other models, like the ICAO CORSIA model, rely on outdated data about agriculture and, as a result, greatly overstate the environmental impact of farm-based feedstocks for fuels like SAF. For instance, the ICAO total lifecycle emissions estimate for ethanol-to-jet SAF is 90.8 g/MJ – 71 percent higher than the total emissions estimate from GREET (53.2 g/MJ). More broadly, ICAO methodologies and data are over a decade old and rely on a land use estimate for ethanol that is 3.5 times higher than GREET (25.1 vs 7.4). This doesn’t accurately reflect the increased efficiency of the modern farm, which can now grow more and more corn on fewer acres. Worse, limiting new incentives via ICAO’s model would effectively end any serious hope of decarbonizing air travel and directly contradict President Biden’s promise that “farmers are going to provide 95 percent of all the sustainable airline fuel.”

Tax incentives awarded using the GREET model have the potential to spur even more new investments in climate-smart farming practices, carbon capture, utilization, and storage (CCUS), renewable energy, and other proven emissions-reducing technologies. If implemented with an eye on maximizing carbon reductions, the IRA will drive our industry toward a cleaner future by expanding the volume of low-carbon biofuels in transportation on the ground and in the air. Accurate, complete, and consistent lifecycle analysis is central to the effectiveness of the IRA, particularly for section 45Z (the Clean Fuel Production Credit). We need a Clean Fuel Production Credit (45Z) that recognizes a wide range of on-farm and biorefinery carbon reduction technologies to drive us to net zero ethanol. We also need regulators to provide flexibility to producers in how they elect to use the credits outlined in Section 45Z.  

Done right, these incentives could be a game-changer for the low-carbon economy. Growth Energy’s own research demonstrates that the 45Z clean fuel production tax credit alone could provide $21.2 billion in GDP for the U.S. economy; provide nearly $13.4 billion in household income; support more than 192,000 jobs in all sectors of the national economy; and provide a 10 percent premium ($0.60-$0.70 per bushel) for farmers growing lower carbon intensity corn. 

Unlike other models, GREET provides the tools to accurately credit conservation practices and emissions reductions from regenerative farming, climate smart agriculture, and carbon capture and storage. Exclusion of these factors would eliminate the incentive to adopt them – an enormous lost opportunity to reduce emissions. In fact, Argonne’s research shows that, with climate-smart farming practices, ethanol-to-jet SAF can be 153 percent less carbon intensive than petroleum-based jet fuel.